By Paul Reilly
In John Goodman’s book, Strategic Customer Service, he highlights the high cost of losing a customer. He shows that it costs up to twenty times more to win a new customer versus keep an existing one happy. Are you doing everything you can to keep your customers happy?
Steady, repeat business lulls salespeople into a false sense of security. This complacency leads to mediocre effort and little value creation. On the contrary, value-added salespeople work harder to retain the business than they did to win the business. Too many salespeople fail to realize that their best customers are the competitor’s best prospects.
Salespeople claim they don’t have time for retention calls. With increased quotas and high-performance expectations, there is not enough time to call on existing customers. Ironically, there’s never time for retention calls, but there is always time to prospect to replace lost business. Wouldn’t it make more sense to double-up your retention efforts?
Account protection and growth are not separate activities; they are part of a broader strategy called defensive selling. In defensive selling, you’re creating more value for the buyer and protecting existing business. Creating more value leads to more opportunities.
Here are three defensive selling strategies to help you grow and protect your business with existing customers.
Tinkering is re-creating value for existing customers. It means having a productive discomfort with the status quo. Many salespeople become complacent. These salespeople fail to realize that their competitors are working harder to win the business than they are to keep the business. To help you tinker, ask yourself, “How can I make it easier to do business with our company?” and “What are some ways I can create more value for this customer?”
Value reinforcement is reminding the customer of the value you create and getting credit for the impact it’s had on their business. As most people are unaware of the air they breathe, most customers are unaware of the value they receive.
Value reinforcement is an essential messaging tool because it supports your value proposition. Value reinforcement supports the customer’s buying decision. It’s proof that your solution did what you said it would do.
Leveraging is a focused effort on growing your existing business. Leveraging is gaining maximum results with minimal effort. It’s more profitable to grow your business with existing customers. The cost to serve these customers is lower.
There are several different ways to leverage an existing customer relationship. Vertical account penetration is expanding your depth and breadth of products. Horizontal account penetration is selling to additional locations. You can also ask for referral business. Referrals are the easiest and most effective way to initiate contact with a new prospect.
The defensive selling formula is simple: create more value for the customer, remind the customer of that value and its impact on their business, and grow your business by leveraging the customer relationship. The best offense is a good defense.